Today, an eight-story luxury condo building is rising on the site of an old Cadillac dealership on Presidential Boulevard — land that once was contaminated enough with pollutants to qualify as what the government and developers call a brownfield.

Buyers are lining up to pay up to $2.2 million to live there. And local officials are greeting the Corinthian condos and developer Brian O'Neill with open arms.

Why?

"We're one of the wealthiest communities in Pennsylvania, but we've run out of real estate," says Jim Ettelson, a commissioner in the township that includes Bala Cynwyd. "We have to tear down or use things that don't exist anymore. That means old buildings and old industrial sites."

From the tony suburbs of Philadelphia to middle-class cities and inner-city neighborhoods in New Jersey, Illinois and California, developers are snapping up abandoned mills, factories, landfills, gas stations and quarries and putting up condos, apartments, town houses and single-family homes.

They're willing to clean up industrial and commercial sites contaminated with toxic and hazardous materials to get their hands on land in prime locations. And consumers increasingly are willing to pay top dollar to live on land once not fit for habitation.

The Environmental Protection Agency's Brownfields Program has been in place for 10 years but most residential developers, fearful of the high costs, potential liability and strict government oversight, stayed away.

Now, as suburbs rein in development and more people demand housing near jobs, entertainment and mass transit where land is scarce, turning brownfields into homes makes financial sense.

Coupled with astronomical housing prices, more expertise in environmental cleanups, less red tape and more government financial aid, brownfields are looking golden.

"It's something that people aren't afraid of anymore," says Michele Christina, a principal with Brownfield Redevelopment Solutions in Camden, N.J.

In New Orleans and other cities flooded by Hurricane Katrina and Hurricane Rita, the EPA is helping to assess how much land was contaminated and whether it can be redeveloped as housing.

The sudden allure of sites that couldn't be given away a decade ago is driven by:

• The housing boom. Record home sales prices allow developers to recoup their investment in reclaiming polluted land. In California, for example, the median price of a single-family home is more than $500,000.

"Where housing prices have gone in Southern California, it is today economical to redevelop and remediate environmentally challenged sites," says Dan Flynn, a vice president of land acquisitions for John Laing Homes. "Years ago, it didn't make enough sense."

The company, based in Newport Beach, is building homes on an old trucking depot and a lock manufacturing site in Anaheim. It also is building town houses and duplexes on an oil tank site in nearby Huntington Beach. On 37 acres near Los Angeles International Airport, the company is building 123 single-family homes in Aria at Renaissance, a gated community on land once used for oil drilling and storage. Prices range from $400,000 to $700,000, and 1,500 people showed up for the grand opening.

"Each time (a conversion to residential) happens successfully, people get a little more confident that they can do it," says Michael Greenberg, director of the National Center for Neighborhood and Brownfields Redevelopment at New Jersey's Rutgers University.

• Demographic changes. Baby boomers are aging and their children leaving home. Young people are delaying marriage and childbirth. More suburbanites are getting fed up with long commutes. This trifecta is making cities and close-in suburbs more appealing. Empty-nesters and young childless couples are less concerned about the quality of public schools than the convenience and entertainment options urban lifestyles bring.

"Schools don't matter to two-thirds of American households that do not have school-age children — retirees, singles, gays," says Ed McMahon, senior resident fellow at the Urban Land Institute, a research and education group that promotes innovative development.

Marvin Segel, 50, who is twice-divorced and has a grown daughter, sold his 4,600-square-foot house in Valley Forge Woods, outside Philadelphia. He now rents a luxury apartment 5 miles away in Riverview Landing, one of O'Neill's brownfield projects. Built on the site of an old silent movie studio, the complex sits on the banks of the Schuylkill River.

Segel says that what he spent on property taxes and lawn care equals his $2,200 monthly rent for a three-bedroom, two-bath corner unit that has 19-foot ceilings and overlooks a bike path he rides with his cycling team. "I love the convenience, I love the lifestyle," says Segel, who owns a marketing company 2 miles away in King of Prussia. "It was such a liberating experience to sell my snowblower."

• Growth controls. Restrictions in suburbs are making it tougher for developers to build on farmland and open space. One of the nation's largest home builders, New Jersey-based K. Hovnanian Companies, says the state's growth plan has reduced the supply of land and jacked up housing prices.

"It is getting harder to build a single-family home in the suburbs," communications director Doug Fenichel says. "In a lot of places, there's a no-growth attitude."

Hovnanian is building the Tides at Seaboard Point, 96 luxury waterfront homes on a former landfill in North Wildwood, N.J. Price: more than $800,000 apiece.

• Less red tape, more money. In 2002, President Bush signed into law the Small Business Liability Relief and Brownfields Revitalization Act, which provided more support for reusing the nation's estimated 1 million brownfields.

EPA grants for cleanup and other work have doubled from 2000 to 2004 to $75.4 million and will grow to $77 million this year. States are getting an additional $50 million a year in direct grants from the EPA to redevelop the sites.

Health worries fade

Those who remember the Love Canal disaster of the 1970s may shudder at the thought of living on brownfields. But the health problems alleged by people living on the old chemical waste landfill in Niagara Falls, N.Y., from birth defects to chromosome damage, and the myriad lawsuits that followed are unlikely to happen today, environmental lawyer Curtis Toll says.

"That was a long time ago," says Toll, a lawyer with the Philadelphia law firm of Greenberg Traurig LLP who represents developers, buyers and tenants. "More recent projects have been much more attuned to risks to human health and the environment. ... Most developers take this very, very seriously."

Bill Rattazzi, a vice president at John Laing Homes in California, says homes built on brownfields often are safer than 50-year-old homes in residential neighborhoods. "People are living in (old) houses where radon has been a big issue," he says. Radon, a radioactive gas, can cause lung cancer.

Based on the sales records of these developments, health and safety hazards don't seem to concern consumers as long as government oversight is strong. No one has challenged the state programs and asked the EPA to intervene since the 2002 law was passed, says Sven-Erik Kaiser of the EPA's Brownfields Program.

The fact that his apartment is on the site of the former Synthane-Taylor paper mill doesn't bother Segel. "Knowing how conservative everybody is nowadays about making sure everything is done right, that was not one thought that entered my mind at all," he says.

Communities buy in

As public pressure mounts to protect pristine land and open space, communities starved for housing are more receptive to recycling lots in developed areas. Studies cited by EPA show that an average 4.5 acres of open space are saved every time one acre of brownfields is reused.

Point Hueneme, a coastal city in California's Ventura County, had issued only 90 housing permits in 10 years. Then John Laing Homes bought 17 acres of brownfields where a boat and car-storage yard, welding shop and truck facility had been and proposed cleaning the site to build 65 single-family homes and 85 town houses.

"They don't have housing, and people were commuting extraordinary distances to get to work," Rattazzi says. Single-family homes would sell for about $600,000 and town homes for more than $400,000. Nine town houses would be donated to the city and sold at half the price as affordable housing.

O'Neill Properties Group, recognizing the demand for new housing close to downtown Philadelphia, has grabbed every "prime crummy site" in the region, Ettelson says.

There are plenty such locations in this elite pocket where industry barons built their mansions close to the mills, quarries and factories that made their fortunes. The mansions are still there, but the industrial sites have languished.

O'Neill is developing 7,186 residential units on brownfields. His upscale projects include: Rockford Falls, 1,000 condos and town homes in an abandoned textile mill in Wilmington, Del.; Mill Creek, 22 luxury condos in an old grist and munitions mill in Gladwyne, Pa.; Worthington, a town center with 600 housing units, retail and office space in the old Worthington Steel plant in Malvern, another community along the "Main Line" of the Pennsylvania Railroad.

Officials and developers know the stakes are high.

"It's really, really important that local health officials make sure that this is done right," says Greenberg of Rutgers. "If there is a case in the U.S. where somebody doesn't do due diligence, it will spread like wildfire across the country."